Meet our future: The millennials and their impact on digital payments
Today there are 1.7 billion millennials, making up one-fourth of the world’s population. As the first millennials have just turned 35, their power as a consumer group is on the rise, shaping the global arena in accordance with their taste, preferences and priorities. So understanding millennials is understanding the future…
According to Nielsen Global Survey conducted in more than 60 countries; millennials are inborn “multitaskers” and digital natives. Therefore; they expect technology to evolve in accordance with their needs. They give great importance to personal experience and demand each and every product&service tailored exclusively for them. This may sound like they are asocial, but on the contrary they are community-driven and care for the society and the world more than any other generation. They also give priority to a balanced life; they do sports, eat well and want to stay engaged in the social life, hence using mobile devices and digitalized solutions more than ever. So, connectivity and convenience are the two main words defining millennials as well as the future.
Driving force behind the development of digital payment methods
As millennials become the new “spending power”, they shape the payment trends and needless to say they love digital payment methods. Researches show that they are the true drive behind many innovations in the digital payments sector as they are eager to use them and challenge the companies develop better solutions.
For now, mobile payments are the number one preference among digital payment methods. IDC Retail Insights estimates that worldwide mobile payments will account for USD 1 trillion in 2017. The total value of mobile payment transactions in the US will grow 210% in 2016. And 6 out of 10 millennials say they will use it even more if the transactions are faster. This insight makes it clear that solutions based on near field communications (NFC) like Apple Pay and Android Pay will be on the high demand, and also mobile wallets, especially those based on semi-closed platforms, will grow rapidly.
Prepaid cards also on demand as an alternative to conventional bank accounts. According to MasterCard Ipsos MORI survey; prepaid cards offer unique opportunities especially for the younger millennials to learn basic principles of money management and better control their finances.
The wearables, on the other hand, are to become the real star of payment devices for millennials although it would take years to reach its potential. Today watches, wristbands, glasses, and even contact lenses can become a payment device through real-time computing devices that can be worn. 2 out of 10 millennials in America who comprise the largest population in the country with a total number of 80 million have already used a wearable as a payment device. The country has also one of the highest rates in using mobile banking apps; 57% of the 18- to 25-year-old range use them. According to a recent research by Accenture, they are also very much interested in connected commerce. This is the ability to make payments via objects with Internet connectivity—anything from wearables to appliances and cars.
By millennials’ demand and interest, the mobile and wearable contactless payments market grows rapidly. The market is expected to reach USD 95 billion annually by 2018.
e-Commerce grows hand in hand with digital payments
Digital payment is the backbone of e-commerce and m-commerce. They grow hand in hand. Turkey has one such story. The country has a young population – the median age is 30. And 97% of millennials shops online making its e-commerce marketplace one of the the fastest growing markets in the world, hence a rapid growth in credit card use.
According to the latest report by BKM (The Interbank Card Center); digital payments constitute the largest segment of the payment market in Turkey with a trading size of USD 17.5 billion. Card payments over the Internet have increased by 32% between February 2015 to February 2016. Moreover, 42.8 million people are expected to use digital payments, and e-commerce is to increase up to 90% in Turkey by 2020.
Born into the digital systems, millennials are sensitive to security issues and identity fraud. They demand rock-solid security. So it is a great challenge for companies to provide a secure digital payment system which is also easy and fast to access.
Millennials choice of safer digital payment method, according to Accenture research, is gift cards. 66% of millennials believe gift cards or alternative payment options, such as Paypal, limit identity fraud.
Simple, Speedy, Safe…
When it comes to the digital payment methods millennials are open to a variety of options as long as they are simple, speedy and safe.
At Cardtek we are aware of this fact and we thrive for transforming payments industry through digital technology and strong partnerships. We collaborate with various industries primarily banks, processors, telecom operators and retailers in order to offer the best digital payment experience to the consumers.
Through a deep understanding of consumers’ habits and expectations, we develop the systems of the tomorrow. This is the foundation of our integrated digital payment platform which manages the complete life cycle of digitized cards. From the enrollment process to the operations of provisioning and secure management of credentials, we are dedicated to offer digital payment methods in the international standards.
Our philosophy is to develop smart and safe technologies which are user friendly that can be integrated to payment ecosystems easily.
Global partnerships with leading companies including MasterCard, FIS, Deutsche Telekom, SIA; along with 100+ EMV and digital payment experts with over 7 years’ experience are our true assets in the sector.
We are ready to welcome millennials and the future.